Blogging on liberty, capitalism, reason, international affairs and foreign policy, from a distinctly libertarian and objectivist perspective

Tuesday, April 27, 2010

UK election: Evading unpleasant truths

Besides me not actually being in the UK for around a week, I've not blogged about the UK election lately because it has been an exercise in comprehensive banality largely focused by an unusual degree of hyperactive psephology.

Given that was fun just to write on its own, it is timely that the Institute of Fiscal Studies (an economics think tank that was formed in the 1960s) announced today that the three main political parties are misleading British voters of the scale of the budget deficit problem.

According to the Daily Telegraph, the IFS said ""Over the four years starting next year, Labour and the Liberal Democrats would need to deliver the deepest sustained cuts to spending on public services since the late 1970s,"

"While, starting this year, the Conservatives would need to deliver cuts to spending on public services that have not been delivered over any five-year period since the Second World War."

You see, the fundamental enormous lie they are all spreading is that the budget deficit is the highest it has ever been, by any measure, and public debt is the highest it has been, by any measure, for over a century.

This debt is, in part, because Gordon Brown decided to nationalise banks rather than let them fail, but is also because he has consistently run budget deficits over the last nine years. Borrowing, spending and hoping, so Labour could be re-elected by the people receiving the largesse stolen in advance from future taxpayers.

Most of that borrowing has not even been for the sort of infrastructure projects some economists argue produces a net positive outcome for the economy either. It has been to pay for the ever growing expansion of the welfare state in all of its forms.

Gordon Brown has tried to campaign on "business as usual". Labour, you see, "invests" its borrow stolen loot - "investing" means paying for wealthy pensioners to get free bus passes and subsidised gas and electricity. "Investing" means propping up homeowners who foolishly borrowed too much and have mortgages worth more than their properties. "Investing" means paying for new bureaucracies to run neo-Stalinist big brother checks on people who may spend time with children, vetting those without convictions or even charges. "Investing" means pouring money down the ever poorly performing ponzi style health and state pension plans. YOU can't invest of course, or rather, your children can't (since it will be them forced to pay for it). Don't be so selfish.

How can any person seriously trust this man with a piggy bank, let alone the finances of the world's sixth largest economy? Particularly when his own Treasury Secretary let it slip that the necessary cuts in state spending will be greater than that implemented under Thatcher's government in the 1980s (which frankly were modest), at the same time as Labour promises to introduce a socialised care service for the elderly.

Labour is lying and it knows it, because all it has ever offered the UK electorate, fundamentally, is to spend more of its money and to grow the role of the state. It will be cutting spending, and increasing taxes if it gets elected, because if it does not address the deficit convincingly, it will hurt the pound, the sharemarket and Britain's credit rating. However, Labour is partly expecting to lose, and is hoping to stem losses by promising to the masses to continue giving them more unearned proceeds from future taxpayers.

What about the Conservatives? Well, the only thing going for them is that they haven't wrecked the country's finances. The Conservatives say they'll be more ruthless on improving the efficiency of the state, but they too are fundamentally dishonest. They continue to promise real increases in spending on the centrally planned and "free at point of use" (so unlimited demand) state health system, and in aid to the wealthy in poor countries. They continue to promise toys like a state subsidised high speed rail line for business travellers. The Conservatives simply stopped talking about cutting spending because the lumpen-proletariat didn't like the truth, especially since Labour and the Liberal Democrats kept promising money borrowed from future taxpayers.

Taxpayers (and let's be honest, many millions who are net tax recipients), you see, appear to like being promised goodies, paid for by someone else, no doubt because past governments have treated them like children. So the Conservatives have chosen just to keep quiet.

The Liberal Democrats are having it both ways, because they claim to support deep cuts, although they also seek to increase some taxes and abolish income tax on the low paid. The net effect is not that different from Labour.

However, their cuts range, like abolishing ID cards (not much money), not replacing Britain's nuclear deterrent (not a lot year on year, but a fundamental change to foreign policy), to abolishing government subsidised Child Trust Funds. Slightly more honest? Well they would be if they were worth much, but most of what they say is the same "efficiency savings" "reduce bureaucracy" Sir Humphrey speak that is code for keeping the state as big as it is. The Liberal Democrats are largely an offshoot of the Labour Party. Given the recent celebrity style boost of the polls, the Liberal Democrats are also keeping quiet on spending cuts, as they see an opportunity to plunder Labour voters used to being promised something for nothing.

So what SHOULD be the biggest issue at this election simply isn't - it is whether the next government can avoid the UK making the same sort of failure to deal with public spending that has seen the Irish and Estonian government engage in major cuts in spending on a grand scale, and saw Greece face default.

Are the politicians just liars or is the public too stupid to understand?

Translate

About Me

Life, liberty and the pursuit of happiness. Politics, philosophy and economics from a pro-capitalist, libertarian, objectivist perspective. Born in New Zealand, live in the UK, career has been in transport, telecommunications and infrastructure policy.